1
TELEDESIC CORPORATION
STOCK OPTION AGREEMENT
TO: [NAME FIELD] ("OPTIONEE")
RECITALS
A. The Board of Directors of Teledesic Corporation (the "Corporation")
has adopted the [Restated 1994 Stock Option/Stock Issuance Plan] [1996 Restated
California Stock Option/Stock Issuance Plan] (the "Plan") for the purpose of
attracting and retaining the services of selected Employees (including officers
and directors), nonemployee members of the Board and consultants and other
independent contractors who provide valuable services to the Corporation or any
Parent or Subsidiary.
B. Optionee is an individual who is to render valuable services to the
Corporation or any Parent or Subsidiary, and this Stock Option Agreement (this
"Agreement") is executed pursuant to, and is intended to carry out the purposes
of, the Plan in connection with the Corporation's granting a stock option to
Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in this Agreement, the attached Appendix or the Plan.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION
Subject to and upon the terms and conditions set forth in this Agreement
and the Plan, the Corporation hereby grants to Optionee, as of the Grant Date
set forth below, the following stock option (the "Option") to purchase up to the
number of Option Shares specified below:
GRANT DATE: ________, 1999
NUMBER OF SHARES:
______________
EXERCISE PRICE: $_____________
VESTING COMMENCEMENT DATE: ________, 1999
EXPIRATION DATE: ________, 2009
STATE/COUNTRY OF RESIDENCE:
______________
[TYPE OF OPTION: INCENTIVE STOCK OPTION ("ISO")
The Option is intended to qualify as an ISO under federal income tax
law, but the Corporation does not represent or guarantee that the Option
qualifies as such. As described more fully in Section 19 hereof, should any
portion of the Option exceed ISO limitations, then such excess portion shall be
treated as a Nonstatutory Stock Option.]
[TYPE OF OPTION: Nonstatutory Stock Option]
VESTING SCHEDULE: The Option shall vest and become exercisable [FOR
INITIAL GRANTS: over a period of four years from the Vesting Commencement
Date] [FOR SUBSEQUENT GRANTS: in
2
eight semi-annual installments over a period of four years from the Vesting
Commencement Date] in accordance with the following schedule:
PERIOD OF CONTINUOUS SERVICE PORTION OF TOTAL OPTION
FROM THE VESTING WHICH IS VESTED AND
COMMENCEMENT DATE EXERCISABLE
[One year 25%]
[Six months 12.5%]
Each six-month period of An additional 12.5%
continuous service completed
thereafter
Four Years 100%
Notwithstanding the foregoing, the Option shall become fully vested and
shall remain exercisable for the remaining term of the Option upon a Change in
Control, as such term is defined in the Plan on the date hereof or as such
definition may hereafter be amended, provided that any such amendment shall not
adversely affect any rights of the Optionee under the Plan prior to such
amendment. The Option Shares shall be purchasable from time to time during the
option term at the Exercise Price.
OPTIONEE UNDERSTANDS AND AGREES THAT THE OPTION IS GRANTED SUBJECT TO
AND IN ACCORDANCE WITH THE EXPRESS TERMS AND CONDITIONS OF THE PLAN AND OPTIONEE
HEREBY ACKNOWLEDGES RECEIPT OF A COPY OF THE PLAN. Optionee further agrees to be
bound by the terms and conditions of the Plan and the terms and conditions of
the Option as set forth in this Agreement.
2. MARKET STANDOFF AND RIGHTS OF FIRST OFFER
OPTIONEE HEREBY AGREES THAT ALL OPTION SHARES ACQUIRED UPON THE EXERCISE
OF THE OPTION SHALL BE SUBJECT TO CERTAIN MARKET STANDOFF PROVISIONS AND RIGHTS
OF FIRST OFFER EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS TO REPURCHASE THE
OPTION SHARES UPON ANY PROPOSED SALE, ASSIGNMENT, TRANSFER, ENCUMBRANCE OR OTHER
DISPOSITION OF SUCH SHARES. THE TERMS AND CONDITIONS OF SUCH PROVISIONS AND
RIGHTS WILL BE SPECIFIED IN THE STOCK PURCHASE AGREEMENT IN USE AT THE TIME OF
EXERCISE OF THE OPTION. A COPY THE STOCK PURCHASE AGREEMENT CURRENTLY IN USE IS
AVAILABLE BY REQUEST.
3. OPTION TERM
The Option shall have a maximum term of ten (10) years measured from the
Grant Date and shall accordingly expire at the close of business on the
Expiration Date, unless sooner terminated in accordance with Section 7, 8 or 18
hereof.
-2-
3
4. LIMITED TRANSFERABILITY
The Option shall be neither transferable nor assignable by Optionee
other than by will or the laws of descent and distribution following Optionee's
death and may be exercised only by Optionee during Optionee's lifetime.
5. DATES OF EXERCISE
The Option shall vest and become exercisable in accordance with the
vesting schedule set forth in Section 1 and shall remain so exercisable until
the Expiration Date or sooner termination of the option term under Section 7, 8
or 18 hereof.
6. NO EMPLOYMENT OR SERVICE CONTRACT
Nothing in this Agreement, in the stock purchase agreement to be
executed upon exercise of the Option or in the Plan shall confer upon Optionee
any right to continue in the Service of the Corporation for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Corporation or Optionee, which rights are hereby expressly reserved by
each, to terminate Optionee's Service at any time for any reason whatsoever,
with or without cause.
7. CESSATION OF SERVICE
The option term specified in Section 3 hereof shall terminate (and the
Option shall cease to be outstanding) prior to the Expiration Date should any of
the following provisions apply:
(a) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or pursuant to paragraph (e) below)
while the Option is outstanding, then the period for exercising the Option shall
be reduced to a ninety (90) day period commencing with the date of such
cessation of Service, but in no event shall the Option be exercisable at any
time after the Expiration Date. Upon the expiration of such ninety (90) day
period or (if earlier) upon the Expiration Date, the Option shall terminate and
cease to be outstanding.
(b) Should Optionee die while the Option is outstanding, then the
personal representative of Optionee's estate or the person or persons to whom
the Option is transferred pursuant to Optionee's will or in accordance with the
laws of descent and distribution shall have the right to exercise the Option.
Such right shall lapse and the Option shall cease to be exercisable upon the
earlier of (i) the expiration of the twelve (12) month period measured from the
date of Optionee's death and (ii) the Expiration Date. Upon the expiration of
such twelve (12) month period or (if earlier) upon the Expiration Date, the
Option shall terminate and cease to be outstanding.
(c) Should Optionee cease Service by reason of Permanent
Disability while the Option is outstanding, then Optionee shall have a period of
twelve (12) months (commencing with the date of such cessation of Service)
during which to exercise the Option, but in no event shall the Option be
exercisable at any time after the Expiration Date. Upon the expiration of such
twelve (12) month period or (if earlier) upon the Expiration Date, the Option
shall terminate and cease to be outstanding.
-3-
4
(d) During the limited period of post-Service exercisability
applicable under subsection (a), (b) or (c) above, the Option may not be
exercised in the aggregate for more than the number of Option Shares in which
Optionee is vested at the time of his or her cessation of Service in accordance
with the vesting schedule specified in Section 1 hereof. To the extent Optionee
is not vested in the Option Shares at the time of his or her cessation of
Service, the Option shall immediately terminate and cease to be outstanding with
respect to such Option Shares.
(e) Should (i) Optionee's Service be terminated for misconduct
(including, but not limited to, any act of dishonesty, willful misconduct, fraud
or embezzlement) or (ii) Optionee make any unauthorized use or disclosure of
confidential information or trade secrets of the Corporation or any Parent or
Subsidiary, then in any such event [WASHINGTON: the Option shall terminate
immediately and cease to remain outstanding] [CALIFORNIA ONLY: the vesting of
the Option shall immediately cease. The unvested portion of the Option shall
terminate immediately and cease to be outstanding. Optionee shall have 30 days
from the date of termination to exercise the vested portion of the Option. Upon
the expiration of such 30-day period, the vested portion of the Option shall
terminate and cease to be outstanding].
8. SPECIAL TERMINATION
The Option shall terminate in the event of any Corporate Transaction
except to the extent assumed by the successor corporation or parent thereof.
9. ADJUSTMENT IN OPTION SHARES
(a) Appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to the Option and (ii) the Exercise Price in
the event any change is made to the outstanding Common Stock by reason of any
stock split, stock dividend, spin-off, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration in order to reflect
such change and thereby preclude a dilution or enlargement of benefits
hereunder.
(b) If the Option is to be assumed in connection with a Corporate
Transaction or is otherwise to remain outstanding then it shall be appropriately
adjusted immediately after such Corporate Transaction, to apply and pertain to
the number and class of securities that would have been issuable to Optionee in
the consummation of such Corporate Transaction had the Option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments
shall also be made to the Exercise Price payable per share, provided the
aggregate Exercise Price payable hereunder shall remain the same.
10. PRIVILEGE OF STOCK OWNERSHIP
The holder of the Option shall not have any stockholder rights with
respect to the Option Shares until such individual shall have exercised the
Option and paid the Exercise Price.
-4-
5
11. MANNER OF EXERCISING OPTION
(a) In order to exercise the Option with respect to all or any
part of the Option Shares for which the Option is at the time exercisable,
Optionee (or, in the case of exercise after Optionee's death, Optionee's
executor, administrator, heir or legatee, as the case may be) must take the
following actions:
(i) Execute and deliver to the Secretary of the
Corporation a stock purchase agreement (the "Purchase
Agreement") in the form in use by the Corporation at such time;
(ii) Pay the aggregate Exercise Price for the purchased
Option Shares in one or more of the following alternative forms:
(A) full payment in cash or check made payable
to the Corporation or
(B) any other form that the Plan Administrator
may, in its discretion, approve in accordance with the
provisions of Section 16 hereof.
Should the outstanding Common Stock be registered under Section 12(b) or
12(g) of the Exchange Act at the time the Option is exercised, then the Exercise
Price may also be paid as follows:
(C) in shares of Common Stock held by Optionee
for the requisite period necessary to avoid a charge to
the Corporation's earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise
Date or
(D) to the extent the Option is exercised for
fully vested Option Shares, through a special sale and
remittance procedure pursuant to which Optionee shall
concurrently provide irrevocable written instructions
(1) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on
the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased
shares plus all applicable federal, state and local
income and employment taxes required to be withheld by
the Corporation by reason of such purchase and (2) to
the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm in
order to complete the sale transaction; and
(iii) Furnish to the Corporation appropriate documentation that
the person exercising the Option (if other than Optionee) has the right
to exercise the Option.
Except to the extent the sale and remittance procedure is utilized in
connection with the exercise of the Option for fully vested Option Shares,
payment of the Exercise Price must accompany the Purchase Agreement delivered to
the Corporation.
-5-
6
(b) As soon after the Exercise Date as practical, the Corporation
shall mail or deliver to or on behalf of Optionee (or the other person or
persons exercising the Option) a certificate or certificates representing the
Option Shares purchased under this Agreement with the appropriate legends
affixed thereto.
(c) In no event may the Option be exercised for fractional
shares.
12. COMPLIANCE WITH LAWS AND REGULATIONS
(a) The exercise of the Option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any Stock Exchange on which the Common Stock may be
listed at the time of such exercise and issuance.
(b) In connection with the exercise of the Option, Optionee shall
execute and deliver to the Corporation such representations in writing as may be
requested by the Corporation in order for it to comply with the applicable
requirements of federal and state securities laws.
13. SUCCESSORS AND ASSIGNS
Except to the extent otherwise provided in Section 4 or 8 hereof, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the successors, administrators, heirs, legal representatives and assigns of
Optionee and the successors and assigns of the Corporation.
14. LIABILITY OF CORPORATION
The inability of the Corporation to obtain approval from any regulatory
body having authority deemed by the Corporation to be necessary to the lawful
issuance and sale of any Common Stock pursuant to the Option shall relieve the
Corporation of any liability with respect to the nonissuance or nonsale of the
Common Stock as to which such approval shall not have been obtained. The
Corporation, however, shall use its best efforts to obtain all such approvals.
15. NOTICES
Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the Corporation
in care of the Corporate Secretary at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated below Optionee's signature line
on this Agreement. All notices shall be deemed to have been given or delivered
upon personal delivery or upon deposit in the U.S. mail, postage prepaid and
properly addressed to the party to be notified.
16. LOANS
The Plan Administrator may, in its absolute discretion and without any
obligation to do so, assist Optionee in the exercise of the Option by (a)
authorizing the extension of a full-recourse loan to Optionee from the
Corporation or (b) permitting Optionee to pay the Exercise Price for the
purchased Option Shares in installments over a period of years. The terms of any
-6-
7
such loan or installment method of payment (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.
17. CONSTRUCTION
This Agreement and the Option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the
express terms and provisions of the Plan. All decisions of the Plan
Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest
in the Option.
18. STOCKHOLDER APPROVAL
If the Option Shares covered by this Agreement exceed, as of the Grant
Date, the number of shares of Common Stock that may without stockholder approval
be issued under the Plan, then the Option shall be void with respect to such
excess shares, unless stockholder approval of an amendment sufficiently
increasing the number of shares of Common Stock issuable under the Plan is
obtained in accordance with the provisions of Section III of Article Four of the
Plan.
[NOTE: DELETE SECTION 19 FOR NSOS AND RENUMBER REMAINDER OF DOCUMENT]
19. ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS
The following terms and conditions shall also apply to any portion of
the Option which qualifies as an Incentive Stock Option (the "ISO Portion"):
(a) The ISO Portion shall cease to qualify for favorable tax
treatment as an Incentive Stock Option if (and to the extent) the ISO Portion is
exercised for one or more Option Shares: (i) more than three (3) months after
the date Optionee ceases to be an Employee for any reason other than death or
Permanent Disability or (ii) more than twelve (12) months after the date
Optionee ceases to be an Employee by reason of Permanent Disability.
(b) Should the ISO Portion be designated in Section 1 hereof as
vested and exercisable in installments, then no installment under the ISO
Portion (whether annual or monthly) shall qualify for favorable tax treatment as
an Incentive Stock Option if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which such installment
first becomes exercisable hereunder would, when added to the aggregate value
(determined as of the respective date or dates of grant) of any earlier
installments of the Common Stock and any other securities for which the ISO
Portion or any other Incentive Stock Options granted to Optionee prior to the
Grant Date (whether under the Plan or any other option plan of the Corporation
or any Parent or Subsidiary) first become exercisable during the same calendar
year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should
such One Hundred Thousand Dollar ($100,000) limitation be exceeded in any
calendar year, the ISO Portion shall nevertheless become exercisable for the
excess shares in such calendar year as a Nonstatutory Stock Option.
(c) Should Optionee hold, in addition to the ISO Portion, one or
more other options to purchase Common Stock that become exercisable for the
first time in the same
-7-
8
calendar year as the ISO Portion, then the foregoing limitations on the
exercisability of such options as Incentive Stock Options shall be applied on
the basis of the order in which such options are granted.
(d) To obtain certain tax benefits afforded to ISOs, the Optionee
must hold the shares issued upon the exercise of the Option for two years after
the Grant Date and one year after the Exercise Date. Optionee may be subject to
the alternative minimum tax at the time of exercise. TAX ADVICE SHOULD BE
OBTAINED PRIOR TO EXERCISING THE OPTION OR DISPOSING OF THE SHARES ISSUED UPON
EXERCISE. By accepting the Option, Optionee agrees to promptly notify the
Corporation of any disposition of any of the purchased shares prior to the
expiration of such holding periods.]
20. WITHHOLDING TAXES
Optionee hereby agrees to make appropriate arrangements with the
Corporation or Parent or Subsidiary employing Optionee for the satisfaction of
all federal, state and local income and employment tax withholding requirements
applicable to the exercise of the Option.
21. LIMITATION ON RIGHTS; NO RIGHT TO FUTURE GRANTS; EXTRAORDINARY ITEM OF
COMPENSATION
By entering into this Agreement and accepting the grant of the Option
evidenced hereby, Optionee acknowledges: (a) that the Plan is discretionary in
nature and may be suspended or terminated by the Corporation at any time; (b)
that the grant of the Option is a one-time benefit which does not create any
contractual or other right to receive future grants of options, or benefits in
lieu of options; (c) that all determinations with respect to any such future
grants, including, but not limited to, the times when options will be granted,
the number of shares subject to each option, the option price, and the time or
times when each option will be exercisable, will be at the sole discretion of
the Corporation; (d) that Optionee's participation in the Plan is voluntary; (e)
that the value of the Option is an extraordinary item of compensation which is
outside the scope of Optionee's employment contract, if any; (f) that the Option
is not part of normal or expected compensation for purposes of calculating any
severance, resignation, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments; (g)
that the vesting of the Option ceases upon termination of employment or service
relationship with the Corporation for any reason except as may otherwise be
explicitly provided in the Plan or this Agreement or otherwise permitted by the
Plan Administrator; (h) that the future value of the underlying Option Shares is
unknown and cannot be predicted with certainty; and (i) that if the underlying
Option Shares do not increase in value, the Option will have no value.
22. GOVERNING LAW
The parties submit to the exclusive jurisdiction and venue of the
federal or state courts of Washington, County of King, to resolve issues that
may arise out of or relate to this Agreement and the Plan or the same subject
matter. This Agreement and the Plan shall be governed by the laws of the State
of Washington, excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of this Agreement and the
Plan to the substantive law of another jurisdiction.
-8-
9
[INSERT THE FOLLOWING FOR NON-US RESIDENTS:
23. EMPLOYEE DATA PRIVACY
By entering this Agreement, Optionee (a) authorizes the Corporation and
Optionee's employer, if different, and any agent of the Corporation
administering the Plan or providing Plan recordkeeping services, to disclose to
the Corporation or any of its affiliates any information and data the
Corporation requests in order to facilitate the grant of the Option and the
administration of the Plan; (b) waive any data privacy rights you may have with
respect to such information; and (c) authorize the Corporation and its agents to
store and transmit such information in electronic form.]
TELEDESIC CORPORATION
By:
-------------------------------------
Dennis James, Vice President and
General Counsel
----------------------------------------
Optionee Signature
----------------------------------------
Print Name
Address:
--------------------------------
--------------------------------
-9-
10
APPENDIX
DEFINITIONS
BOARD shall mean the Corporation's Board of Directors.
COMMON STOCK shall mean the Corporation's Class A Common Stock.
CORPORATE TRANSACTION shall mean any of the following
stockholder-approved transactions to which the Corporation is a party, whether
occurring before or after the Section 12(b) or 12(g) Registration Date:
i. a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Corporation is incorporated;
ii. the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation; or
iii. any reverse merger in which the Corporation is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such merger.
CORPORATION shall mean Teledesic Corporation, a Delaware corporation.
EMPLOYEE shall mean an individual who is in the employ of the
Corporation or any Parent or Subsidiary, subject to the control and direction of
the employer entity as to both the work to be performed and the manner and
method of performance.
EXCHANGE ACT shall mean the Securities and Exchange Act of 1934, as
amended from time to time.
EXERCISE DATE shall mean the date on which the Option shall have been
exercised in accordance with Section 10 of this Agreement.
EXERCISE PRICE shall mean the exercise price per share as specified in
Section 1 of this Agreement.
EXPIRATION DATE shall mean the date on which the Option expires as set
forth in Section 1 of this Agreement.
FAIR MARKET VALUE per share of Common Stock on any relevant date under
the Plan shall mean the value determined in accordance with the following
provisions:
(i) If the Common Stock is not at the time listed or admitted to
trading on any Stock Exchange but is traded on the Nasdaq National
Market, the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as the price is reported
by the National Association of Securities Dealers, Inc. through the
Nasdaq National Market or any successor system. If there is no closing
selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed or admitted for
trading on any Stock Exchange, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question
on the Stock Exchange determined by the Plan Administrator to be the
primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange. If there is no
closing selling price for the Common Stock
11
on the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation
exists.
(iii) If the Common Stock is at the time neither listed nor
admitted to trading on any Stock Exchange nor traded on the Nasdaq
National Market, then such Fair Market Value shall be determined by the
Plan Administrator after taking into account such factors as the Plan
Administrator shall deem appropriate.
GRANT DATE shall mean the date of grant of the Option as set forth in
Section 1 in this Agreement.
INCENTIVE STOCK OPTION shall mean a stock option that satisfies the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended.
ISO PORTION shall mean the portion of the Option which qualifies as an
Incentive Stock Option.
NONSTATUTORY STOCK OPTION shall mean an option not intended to meet the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended.
OPTION shall mean the option to purchase shares of Common Stock as set
forth in Section 1 of this Agreement.
OPTION SHARES shall mean the number of shares of Common Stock subject to
the Option.
OPTIONEE shall mean the person to whom the Option is granted under this
Agreement.
PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than twelve (12) months.
PLAN shall mean the Corporation's Restated 1994 Stock Option/Stock
Issuance Plan.
PLAN ADMINISTRATOR shall mean either the Board or a committee of Board
members, to the extent the committee is at the time responsible for the
administration of the Plan in accordance with Article I, Section IV of the Plan.
PURCHASE AGREEMENT shall mean the stock purchase agreement in the form
in use by the Corporation at the time the Option is exercised.
SECTION 12(g) REGISTRATION DATE shall mean the date on which the initial
registration of any class of securities of the Corporation under Section 12(g)
of the Exchange Act first becomes effective.
SERVICE shall mean the provision of services to the Corporation or any
Parent or Subsidiary by an individual in the capacity of an Employee, a
non-employee member of the Board or a consultant or independent contractor.
STOCK EXCHANGE shall mean the American Stock Exchange, Inc. or the New
York Stock Exchange, Inc.
SUBSIDIARY shall mean each corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
such corporation in the unbroken chain (other than the last corporation) owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
-2-